Media News

Digital Challenges, But Traditional Rates with Agencies

18 May 2012

According to a new Strata quarterly survey of leading agencies, the advertising economy is positive and appears to be back to a new normal. The study found that 64 per cent of respondents said their customers' approach to ad planning is the same as last year (the most since the start of the survey). The advertising industry was consistently steady in the first quarter, with 51 per cent reporting growth will be the same as the last half of 2011.

The survey found that only 11 per cent of agencies see their business decreasing, which is the lowest percentage since the start of the survey. A third of the agencies surveyed plan to hire staff and only 20 per cent said their clients are making cuts to planning, which is the least amount since 2008. The top agency concern is client attraction.

The report shows that TV is the top choice, according to 54 per cent of agency respondents. Overall, 43 per cent of agencies reported they would compete for ad space with political advertisers as opposed to going to an alternative medium. 86 per cent say that they will have either the same or more advertising spend on political vs. the previous 2010 election year (51 per cent say the same as 2010, while 35 per cent say more than 2010).

Spot TV showed gains with 26 per cent saying they are more focused on it than a year ago. Time-shifting is a major concern for 64 per cent of the agencies polled (10 per cent are very concerned, 54 per cent are moderately concerned with time-shifting).

Focus on print increased 217 per cent over fourth quarter 2011, while radio shows an increase of 31 per cent over first quarter 2011 and focus on OOH increased 65 per cent over fourth quarter 2011.

Digital is firmly the second client choice behind TV with 24 per cent of agencies saying above all else Digital is their top medium, says the report. When comparing Digital to a year ago, 79 per cent are more focused on Digital today (up 12 per cent over the last year). Further breaking down Social within the Digital category:

• Facebook remains the top choice for ad agencies at 85 per cent

• YouTube leaped past Twitter for the second spot (45 per cent)

Looking at the larger digital advertising picture, in the next one to three years, 21 per cent of agencies feel they'll have greater spend in Digital than Traditional (though 46 per cent say it will never overtake Traditional):

• Social (69 per cent) is neck and neck with

• Online Display (71 per cent), with

• Search as the third most focused option (65 per cent)

Additionally:• iPhones are still the mobile device of choice for advertisers (75 per cent); Android is second at 57 per cent, down 19 per cent since fourth quarter 2011

• 51 per cent of agencies say that their digital measurement tools are effectively meeting their campaign needs

• 51 per cent of agencies use more than three mediums when placing a campaign, 24 per cent already use three, while 19 per cent use two

John Shelton, CEO and President of Strata, concludes that "... new challenges as the economy returns to a new normal... new ad choices... causing the environment to become more complex... expect Digital Video to continue to shake things up when planning campaigns in 2012... 56 per cent of respondents noting they will use the medium this year..."